Loan Amount Question

[ArkansasRanger]

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In Arkansas education is relatively inexpensive compared to the rest of the country, and I managed to graduate college six years ago at a rather cheap price. In essence, I never filled out a financial aid form, and I finished school debt free.

That said, I know nothing about the entirety of education-related loans. I've perused a few college websites as well as some other material, but I still have a kind of vague question.

I do know that your previous income, savings, and other such values play a role in what you get in loans. My concern is that I really don't want to empty my savings, lose my IRA, or do away with any of the other finances I've worked hard for during the last six years. I like the buffer. That said, I personally would rather take out loans to pay for school and associated living expenses, i.e. housing (not dorms, etc), utilities, groceries, gasoline, comprehensive auto insurance, health insurance, etc. This makes me wonder just how much of a loan can one actually get, and I said this was a vague question. What I'm actually implying here is will a loan be enough to allow one to pay the above noted bills, and have enough money to...I don't know...live, i.e. go see a movie, have a steak at the Outback, buy new socks when you need them....? Make sense?

 

[TMP-SMX]

Are you talking about loans for medical school? Everyone is eligible for $40,500 in stafford loans no matter what your prior income is. The breakdown changes depending on your prior income and savings whether or not you get $8500 in subsidized stafford loans out of that $40,500 or if it is all unsubsidized. If you need above that amount and your school gives you a CoA (budget) higher than that, then you can fill in the shortfall or take out grad plus loans up to that amount. You'll never have to use your personal savings unless you live above your means.

 

[ArkansasRanger]

Ah, I see so at minimum everyone can get $40,500 per year?

 

[sgtbrushes]

I'm not sure if you're asking about undergrad or med school, but cost of attendance is generally the limit for government loans. I.e., even if your tuition only costs $2500/ semester, that'd be max of $7,500 per year, and only that high if you took a full load during the summer. The school does a calculation and estimates what the cost of attendance for a year will be. That will be $7,500 plus

associated living expenses, i.e. housing (not dorms, etc), utilities, groceries, gasoline, comprehensive auto insurance, health insurance, etc.

. Sometimes the CoA will cover all your expenses; sometimes it won't. If it doesn't cover your expenses, you can find a job, take private loans, or eat into your savings.

 

[ArkansasRanger]

I'm not sure if you're asking about undergrad or med school, but cost of attendance is generally the limit for government loans. I.e., even if your tuition only costs $2500/ semester, that'd be max of $7,500 per year, and only that high if you took a full load during the summer. The school does a calculation and estimates what the cost of attendance for a year will be. That will be $7,500 plus . Sometimes the CoA will cover all your expenses; sometimes it won't. If it doesn't cover your expenses, you can find a job, take private loans, or eat into your savings.

Med school. Undergrad is readily affordable out of pocket without putting a damper on anything. You hear of people living off of loans for medical school and the like so how are they doing that then?

 

[TMP-SMX]

Ah, I see so at minimum everyone can get $40,500 per year?

At least that amount. You can get grad plus or private loans above the stafford limit up to the cost of attendance. This all depends how generous your school is, how cheaply you can live, and whether or not you will have enough.

 

[sgtbrushes]

You hear of people living off of loans for medical school and the like so how are they doing that then?

Lots of student loans - as TMP-SMX said, med students often take out loans in the amount of $50,000-ish every year. Pretty much anyone who is accepted into med school can get loans to cover the cost, unless you have really, really bad credit.

 

[ArkansasRanger]

Lots of student loans - as TMP-SMX said, med students often take out loans in the amount of $50,000-ish every year. Pretty much anyone who is accepted into med school can get loans to cover the cost, unless you have really, really bad credit.

Right now the CoA for UAMS here is about $154,000 for all four years with each year in the neighborhood of 38,000 with the exception of the third year for whatever reason. It's 41k.

Thanks for the replies. My concern was adequate housing and eating while not working for four years should I be able to pursue this route.

 

[sgtbrushes]

Right now the CoA for UAMS here is about $154,000 for all four years with each year in the neighborhood of 38,000 with the exception of the third year for whatever reason. It's 41k.

Perhaps this isn't universal, but at my undergraduate institution, third year is the longest year - 12 months - because you are rotating in all the different specialties. Perhaps they charge you more because you spend more time "in school" - i.e., paying to work.

 

[beckhunter116]

At least that amount. You can get grad plus or private loans above the stafford limit up to the cost of attendance. This all depends how generous your school is, how cheaply you can live, and whether or not you will have enough.

I want to strongly suggest that you do a grad plus loan vs a private loan--if stafford loans don't cover the COA.

 

[TMP-SMX]

I want to strongly suggest that you do a grad plus loan vs a private loan--if stafford loans don't cover the COA.

I agree. Though neither is ideal, the terms are usually better with grad plus.

 

[Rankik]

Are grad plus loans through the school? Also, do you apply for them after receiving your first rewards letter from the college? And lastly (so many question, lol), is there a limit on the max amount? I've always wondered this in regards to private medical schools like USC and such (from California 😀).

 

[TMP-SMX]

You file your FAFSA in January, the school calculates your cost of attendance (budget) and you accept whatever offer they give you in terms of aid, and then you apply for a specific lender staffords and grad plus or you go through direct loans which are from the federal government. The max amount of grad plus is up to the cost of attendance set by your school. You'll have $40,500 in staffords and then the rest is grad plus.